In This Article:
Investing.com -- MongoDB (NASDAQ:MDB), once a high-flying software darling, is facing calls from investors for a shake-up, as shares remain down more than 50% from their 52-week high and full-year guidance reveals a sharp deceleration in growth. With pressure building, investors are increasingly hoping that a large activist investor will step in to force operational changes and potentially push the company to explore a sale of the business.
Advertisement: High Yield Savings Offers
The database platform provider reported solid fiscal Q4 results, beating earnings and revenue expectations with EPS of $1.28 versus consensus estimates of $0.66 and revenue of $548.4 million against $520.5 million expected. However, the market’s focus quickly shifted to FY 2026 guidance, which disappointed on both the top and bottom line. Revenue is projected at $2.24 billion to $2.28 billion, below the $2.32 billion analysts had forecast, while full-year EPS is expected to come in between $2.44 and $2.62, well under the $3.39 consensus estimate.
The stock reaction has been stark. Despite MongoDB’s long record of innovation and substantial revenue growth since its 2017 IPO, the market is now digesting the reality that the company is transitioning from a high-growth narrative to a more mature, slower-growth business model. And with that transition, investors say, should come a reassessment of cost structure and strategy.
One area of particular focus is MongoDB’s operating expenses, which remain steep relative to its current cash flow profile. The company spent nearly $600 million on research and development in fiscal 2025, roughly four times the $150 million it generated in operating cash flow. General and administrative costs totaled an additional $220 million. Investors see an opportunity for significant margin improvement through more aggressive cost controls.
Randian Capital, an investor who has followed MongoDB since its early days as a public company, pointed to this misalignment between growth and expense as a key issue, in exclusive comments made to Investing.com. “MDB is spending almost $600mm per year on R&D, relative to a company that generated $150mm in cash from operations in 2025,” Randian wrote. The firm believes “the time is right for MDB to cut costs meaningfully across R&D and the $220mm in annual G&A costs.”
Beyond cost discipline, investors, such as Randian, believe MongoDB should consider strategic alternatives, including a possible sale. With a growing list of slowing software businesses becoming acquisition targets, some argue that MongoDB’s product and market position make it highly attractive to both strategic buyers and private equity. Large tech players such as Amazon (NASDAQ:AMZN), Oracle (NYSE:ORCL), IBM (NYSE:IBM), and SAP have been floated as potential suitors, and an LBO has also been seen as a viable option.